Bank branches may be wiped out from UK high streets by 2032 – will cash access survive?

We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

Bank branches, like many retail based firms, have been affected by coronavirus in recent months. While some may feel that the pandemic is the sole cause for the banking industry’s woes but new analysis reveals they’ve faced ongoing issues for a number of years now.

AskTraders, the financial analysis firm, recently conducted a study using data published by Which? Which found:

  • 7,655 bank branches currently remain open in the UK
  • An average of 55 branches have closed every month for the last five years
  • The final high street branches will close in less than 12 years if the current rate of closures continue

These closures will hit certain parts of the UK harder than others, with Nottingham expected to have the worst access to banks, with London being at the top.

The research found that 86 percent of people used the internet for their banking needs this year but despite this, 19 percent of British people still visited a bank at least once a week.

Additionally, 39 percent of people also said they visited the bank as regularly as they did five years ago.

In light of these findings, Nigel Frith, a senior financial analyst at AskTraders, called on the government to act to protect access to cash: “With 50 million people in the UK still reliant on using cash, the need for security around high street banks is clear to see.

TSB to cut credit interest on this account – deadline to note [INSIGHT]
Negative interest rates: Accounts ‘could go down this path’ [WARNING]
Rishi Sunak reveals new coronavirus support plans – full details [ANALYSIS]

“While high streets and banking groups must continue to evolve, millions of people still rely on the services physical bank branches provide.

“Online banking should certainly be embraced but not at the expense of branches on the high street which meet the nuanced needs of individuals.

“It’s really important the government delivers on its promise to protect access to cash.”

As it stands, the following eight cities have the fewest banks per capita:

  • Nottingham – 13,243 people per branch
  • Bristol – 13,240 people per branch
  • Liverpool – 12,601 people per branch
  • Glasgow – 12,552 people per branch
  • Leicester – 12,249 people per branch
  • Leeds – 11,997 people per branch
  • Manchester – 11,905 people per branch
  • Birmingham – 11,357 people per branch

It should be noted efforts have been made by the FCA, the financial regulator, to protect access to cash for consumers.

In finalised guidance issued in mid-September, the FCA made it clear that banks, building societies and credit unions are expected to keep the regulator informed of any plans for closures or conversions of branches in good time before any final decision is made.

Before a decision is made, firms must provide a clear summary of their analysis of the needs of customers currently using the sites, the impact of the proposals on those customers, and alternatives that are, or could reasonably be, put in place if they implement the proposals.

Throughout this process, the customers involved must be clearly communicated with to ensure they’re aware of appropriate alternatives they can use.

Sheldon Mills, the Interim Executive Director of Strategy and Competition at the FCA, commented on the announcement: “Although closures or conversions are decisions for firms to take, it is important they implement these decisions in ways that are fair to their customers.

“Even during the pandemic, cash remains essential to many consumers.

“The publication of this guidance sets out clearly our expectations on firms and will ensure that firms make it a priority that customers are treated fairly, especially those who are most vulnerable.”

The FCA also detailed they will be working closely with the Payment Systems Regulator (PSR) as part of its wider work to ensure an appropriate and sustainable model of maintaining access to cash.

Source: Read Full Article